Following a scandal in which the former controller of the Palm Beach (Fla.) Convention and Visitors Bureau embezzled about $1.5 million from the organization’s coffers, the Palm Beach County Board of Commissioners will allow the CVB to continue to oversee tourism marketing but has decided to take over oversight of the convention center.
On February 27, the board voted to let the CVB continue to run the bureau. Interim administrator Jim Stuber took it as “a vote of confidence” in both the job the CVB has done in promoting the destination over the years and the plan the bureau has put in place to “recover from the theft and reconstitute the bureau.” Stuber was appointed interim bureau head on January 15, taking over the job of president and CEO Warren McLaughlin. McLaughlin retired in November in the wake of the scandal involving one of his employees.
On October 23, the CVB discovered that controller Donna Duffer had stolen $1.5 million from the CVB over a period of about three years, explains Stuber. She was subsequently arrested; she is currently out on bail.
The CVB has filed a $4.5 million civil suit against Duffer, seeking to recoup the losses and damages. In the meantime, the CVB has put together a plan to pay off the debts incurred as a result of the theft without using public tax dollars, says Stuber. The bulk of the $1 million debt, most of it owed to the Internal Revenue Service, will be paid through insurance claims, he says. The bureau has also taken steps to improve governance and oversight. First, it reconstituted its board, shrinking it from 35 to 15 members. Seven members of the county’s Board of Commissioners will sit on the CVB board. It also appointed an audit committee, created a conflict of interest policy, and hired an outside firm to oversee accounting and bank reconciliation.
The county commissioners had considered taking over oversight of the CVB but ultimately decided to maintain the status quo. Since 1983, the CVB has had a $10 million annual contract with the county to market the destination. “The county indicated that as long as we do what we say we’re going to do, they would prefer that we continue to run that program,” says Stuber.
The county will, however, oversee management of the Palm Beach County Convention Center, a responsibility that had sat with bureau for the three years since the center opened. The bureau oversaw management of the center, contracting out day-to-day operations to a vendor, Global Spectrum. Global Spectrum will continue to manage the center, but the county commissioners will sign the contracts. “The board made it clear that they would like the county to take over the direct operation of it,” says Bob Weisman, Palm Beach County administrator. “The CVB operation of the convention center was really a pass through; they were just running the contractor. There was really nothing the CVB was bringing to the table regarding the actual operation of the convention center.”
Currently, the CVB handles long-term bookings for the center, while Global Spectrum takes care of short-term bookings. The county has not decided if that will continue. The county asked the CVB to consult with the county’s Tourism Development Council, which advises the CVB on how tourism dollars should be spent, to come up with a recommendation on whether to keep the current arrangement in place.
Stuber says group business hasn’t suffered as a result of the scandal. “Our staff has come back with reports from the field that there’s great understanding in the industry that we had a bad apple. It’s not affecting our sales efforts at all.”
The CVB is in the process of hiring a permanent president and CEO. The bureau hired SearchWide, an executive recruiting firm, to conduct the search. Stuber, who says he is not a candidate for the job, expects the new chief to be in place this summer.